The Coming Age of Formulation Economics
For most of modern economic history, intelligence has been understood as a productive resource. A more intelligent worker could solve problems more effectively. A more intelligent manager could allocate resources more efficiently. A more intelligent scientist could discover better explanations for observed phenomena. The underlying assumption remained the same: intelligence creates value by navigating a world whose structure already exists. Artificial intelligence has largely inherited this framework. Discussions about economic impact center on productivity. How many tasks can be automated? How much labor can be replaced? How many reports can be generated, diagnoses performed, contracts reviewed, or lines of code written? These are important questions, but they all concern the same underlying activity: reasoning within an established space. Reasoning, however, may not be the deepest source of economic value. The most transformative developments in history were not simply new solu...